President of Higher Education Software Provider Pleads Guilty to Conspiring to Hack into Competitors’ Computer Systems

The president and chief executive officer of Virginia-based Symplicity Corporation pleaded guilty today to conspiring to hack into the computer systems of two competitors to improve his company’s software development and sales strategy.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Special Agent in Charge Adam S. Lee of the FBI’s Richmond Field Office made the announcement after the plea was accepted by U.S. District Judge Claude M. Hilton in the Eastern District of Virginia.

Ariel Manuel Friedler, 36, of Arlington, Virginia, pleaded guilty to conspiracy to access a protected computer without authorization.   Sentencing is scheduled for Aug. 1, 2014 before U.S. District Judge Anthony J. Trenga in the Eastern District of Virginia.

“The Department of Justice is committed to protecting the intellectual property and private information of our citizens and businesses from economic espionage,” said Acting Assistant Attorney General O’Neil.   “Hackers who think they can anonymously steal confidential information from competitors’ computer systems should take note: we will investigate you, and we will prosecute you.”

“We are committed to working with our law enforcement partners to protect American businesses from intellectual property theft, whether the threat comes from an international or domestic source,” said U.S. Attorney Boente.  “This case should send a clear message:  We will aggressively prosecute criminals who attempt to steal confidential business information while hiding behind a cloak of anonymity.”
“This was a complex investigation involving senior executive management of the Symplicity Corporation who used sensitive customer login credentials to gain unauthorized access to their competitor’s computer networks” said Special Agent in Charge Lee.  “These actions caused significant harm to their competitors and ultimately gave Symplicity an unfair business advantage.  Although many victim businesses seek civil remedies in situations like this, reporting breaches of business computer networks to law enforcement is crucial towards combating these types of crimes.”
According to court records filed with the plea agreement, Symplicity provides student disciplinary records management services to colleges and universities.   Friedler conspired with two other Symplicity employees between 2007 and 2011 to hack into the computer systems of two companies that competed with Symplicity’s business.  Friedler and others decrypted account passwords of former customers, and Friedler hid his IP address using TOR, a network of computers used to encrypt and anonymize online communications.   Friedler then accessed customer contacts and viewed the proprietary and confidential software design and features of competitors Maxient LLC and a second company, identified in court documents as “Company A,” to inform Symplicity’s software development and sales strategy.

This case was investigated by the FBI’s Richmond Field Office.   Trial Attorney Peter V. Roman of the Criminal Division ’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Alexander T.H. Nguyen of the Eastern District of Virginia are prosecuting the case.